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Will High Costs & Low Sales Dent Braskem (BAK) Q1 Earnings?

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Braskem S.A. (BAK - Free Report) is set to release first-quarter results on May 11. The current Zacks Consensus Estimate for the to-be-reported quarter is a profit of 82 cents per share on revenues of $4.8 billion.

Let’s delve into the factors that might have influenced the Brazilian petrochemical firm’s results in the March quarter. But it’s worth taking a look at BAK’s previous-quarter performance first.

Highlights of Q4 Earnings

In the last-reported quarter, the leading plastics producer missed the consensus mark on lower margin in the overseas market. BAK had reported earnings per share of 24 cents, below the Zacks Consensus Estimate of $2.51. Revenues of $5.1 billion generated by the firm also missed the Zacks Consensus Estimate by 3.4%.
 

NOV Inc. Price, Consensus and EPS Surprise

NOV Inc. Price, Consensus and EPS Surprise

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Trend in Estimate Revision

The Zacks Consensus Estimate for the first-quarter bottom line has remained the same in the last seven days. The estimated figure indicates a 28.7% fall year over year. The Zacks Consensus Estimate for revenues, meanwhile, suggests a 16.3% increase from the year-ago period.

Factors to Consider

Braskem is expected to have borne the brunt of lower sales volumes. In the October-to-December period, the company reported a 13% decline in sales, affected by weak demand in the Brazilian market. The downtrend is most likely to have continued in the first quarter, with export supply chain restrictions. This fall in volume is likely to have dragged down the revenues and cash flows of BAK.

The increase in Braskem’s costs might have dented the company’s to-be-reported bottom line. BAK’s cost of goods sold in the fourth quarter climbed to R$21.5 billion from R$13.8 billion in the year-earlier period. The upward cost trajectory is likely to have continued in the first quarter due to higher feedstock prices in international markets and global supply chain constraints.

What Does Our Model Say?

The proven Zacks model does not conclusively show that Ovintiv is likely to beat estimates in the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: BAK has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 82 cents per share each.

Zacks Rank: Braskem currently carries a Zacks Rank #5 (Sell).

Stocks to Consider

While an earnings beat looks uncertain for Braskem, here are some firms that you may want to consider on the basis of our model:

HighPeak Energy, Inc. (HPK - Free Report) has an Earnings ESP of +2.97% and a Zacks Rank #1. The firm is scheduled to release earnings on May 16.

You can see the complete list of today’s Zacks #1 Rank stocks here.

For 2022, HPK has a projected earnings growth rate of 580.3%. Valued at around $2.9 billion, HighPeak Energy has soared around 216.5% in a year.

Blend Labs, Inc. (BLND - Free Report) has an Earnings ESP of +1.92% and is Zacks #2 Ranked. The firm is scheduled to release earnings on May 12.

BLND is valued at around $874.7 million. For 2022, the company has a projected earnings growth rate of 22.7%. Blend Labs has lost around 83.7% in a year.
    
BioCardia, Inc. (BCDA - Free Report) has an Earnings ESP of +6.67% and a Zacks Rank #3. The firm is scheduled to release earnings on May 11.

For 2022, BCDA has a projected earnings growth rate of 2.7%. Valued at around $25.3 million, BioCardia has decreased around 61.4% in a year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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